business news in context, analysis with attitude

Published reports say that Costco has decided to stop carrying Procter & Gamble’s Pampers brand disposable diapers in about 70 percent of its stores, deciding instead to carry Kimberly Clark’s Huggies brand as well as a private label disposable diaper manufactured for it by Kimberly Clark.

The reason, according to reports, is a pricing dispute, though neither company is speaking on the record about the situation.

Some analysts say that the decision could cost P&G as much as $200 million in revenue a year, or as much as three percent of Pampers’ annual sales.
KC's View:
Once again, this story shows the power that enormous retailers can have. It was just last week that we reported that because of a dispute over pricing, Wal-Mart will cut back on the number of bananas it buys from Chiquita by one-third – which will have the impact of reducing Chiquita’s US banana market share from 37 percent to 33 percent. It isn’t that Wal-Mart is going to sell less bananas. It’s just that it is going to get many of them elsewhere.

Which sort of mirrors the Costco/Pampers situation.